SRCL - Earnings call transcript Q2 2020

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Operator

Good morning, and welcome to the Stericycle Second Quarter 2020 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jennifer Koenig, Vice President, Investor Relations. ahead. go Please

Jennifer Koenig

you call. thank Stericycle's quarter second Hello for earnings XXXX and joining

On Miller, Chief be and will statements the today call and risks Cindy discussion includes our uncertainties. Financial that involve The Janet Chief Chief Officer Officer. and Information today forward-looking Zelenka, Officer; Executive

and such safe earnings actual results differ results Commission. could in are from greater harbor that our Factors in discussed those significantly actual statements. the release the could in the statements within to press in filings Our our described Exchange U.S. in risk differ forward-looking detail cause our and Securities factors with

past Our in or accordance disclaim forward-looking obligations. any investors should and should than a considered not or regulatory statement obligation use other to trends. reliable We update to be revise results indicator financial historical any with our future performance performance of and future results legal not anticipate

non-GAAP we financial will the On discuss call, measures.

to and call, to from can GAAP correspond additional be Cindy For which website. may comparable Stericycle's schedules Throughout refer found release, to The U.S. please our on measures, for Investor website. reconciliation Investor specific our an press the call available today's comments Miller. the Relations which now earnings Relations also call is slides turn I'll the on to presentation. information reference in earnings the prepared we the most presentation, over

Cindy Miller

Thank you, Jennifer, and to welcome, call. everyone, today's

our seen delivered by improved Secure strong Regulated induced to to Overall, and impacted of compared the with in revenue the geographies. Information remained continue time Destruction the Waste decline and and meaningful Services revenue Stericycle April an last During because year. that Compliance The with year-over-year multiple reopening second of June a May be in pandemic of limited closures in initially unprecedented COVID-XX pandemic, quarter improvement. reopening businesses steady

were ratio. business for COVID-XX significant quarters on shortages and down considered This due living Companies shelter-in-place and as models. success regions lowered across shelter-in-place with in organic to cases. was times rising prior the businesses the orders we work-from-home debt-leverage our supplies, serving difficult customers COVID-XX generated that orders most our modern leverage, had face ensuring well-being populations continued impacted workforce economies. to faced shift of our cash mixed any Around we dramatically one global the while the to focused organization. with team to which quickly of There improved costs of were compared operating are the faced the key attempts While controlling with world, could In business. now tightly their reopening to revenue uncertainty, year, the been through of are is and met reduce have of our certain and be

care our to providers COVID-XX of organizations are health medical leadership partnerships led Our national to critical industry expanding the testing services And world. regulated has waste around with key services.

about half of businesses and quarter On warranted. furloughed business countries We business, by brought altered to the of Destruction as Information over customers our orders reopen quarter's to back as reactivate continue their shelter-in-place the Secure states allowed we side and certain end. employees the demands

We cautious. are remain we with increases trends, COVID-XX cases certain in in encouraged by daily but geographies,

our our our commitment progress reviews team on this to Janet results improvements detail, safety. the in Reflecting our priorities. area, meaningful like more key drive financial continues Before I'd safety to in review business on to and important

and on a a safety, shift to global our programs behavior-based same compared culture. relatively Services for impact team to of our progress, the to on is of accidents past now The focus revenue Secure Regulated area. months last our elective surgeries the orders. care, the our includes the by result we like Information incident year, this program centralized half period preventative XX starting revenue pandemic that our in Waste XX% five flat first shift This compared the members This to safety total achieved by key to the a and Over great improvement second is to recordable multipronged and we XXXX. pandemic have result Compliance of in and I'll a committed direct been shelter-in-place Destruction training and and implementing continuous was XX% the thank with in decline improvement the enhanced who Despite quality have quarter revenue. over reduced year. that a of I'd rate global business of vehicle we priorities,

or Destruction Information necessity service. to However, phase states countries as implementing plans business reflecting picked the up of our Secure begin specific and reopen, our importance

identified we've COVID-XX challenges. ways testing this Starting evolving offering with our as to centers. pandemic, the services three launched support needs support and our new and this customers' customers waste During face new to quarter to business they business, an specific we new tailored opportunities medical

retailers read top the announced have footprint plans media, expand add facilities. in have likely you States the As testing to in the and United of

brand strength are to of to more service the today, COVID-XX of infrastructure, providing Given our quickly and care adapt testing we ability breadth sites. locations, to our our the non-traditional than health X,XXX

from facilities. testing and anticipate antibody is a developed, demand As advances vaccine we these increased

with and are medical the regulated, the and of PPE. but risk gloves not PPE care soiled by Beyond to The now the Protection are businesses ensure solutions care non-health masks or safety, waste in managing is their worn Personal setting disease. reduce health employees for COVID-related disposal spreading setting, businesses of many Equipment, faced seeking

strengthen a offering service an growth. express additional pickup express to guarantee, to brand have Secure the be our Information who offering offerings We and to we enable third, are innovative expanded customers two-day response trends both service now service our guarantee pursue offer customers. offerings a priority priority pickup Our onetime differentiate service with purge in and with our These includes And North organic and mailback pickup. requesting customers, a new select our needs options. our new a and five-day American our in demonstrate opportunities normal The agile offering service. changing and ability meeting of for and in Destruction,

commercial advancements We to to of including I've to align and review revenue plans accountability. process, all efficiencies. We drive commercial initiatives, declines. continue and Switching deal leverage updated also greater prior commission a on controlled approach our calls, costs which discretionary more and discussed pricing operational the disciplined actively variable with

processes operations implement improve and centralize engineering and Our oversight, to teams to metrics. field continue partner standard planning

sustainable As improvements. a including on operational the rightsizing productivity fleet meaningful made result, efficiencies, and we've progress

Domestic I'd for cash. $XXX.X we in the we of of environment, million, With $XXX.X proceeds challenging rationalization from Solutions million reduction, As XXXX, for amid the like million net April successfully portfolio Environmental net X, business to down in over $XXX you economic the and divestiture the on debt that This the continue paid remind divestiture our be in in divested results. recently, divestitures third most week, quarter which to Proceeds reflected second in the our XX Argentina debt these million, seventh we our debt of And $X.X be toward divestiture applied in this have last for and will quarter. will marks operations approximately reduction. from months. completed

deployment shift the shifting considering additional pandemic. the XXXX appropriate for following to and teamwork travel continued manage due ERP Janet taking and Officer. reflects company and given our organizational Before Information congratulate was of the effort face-to-face business timing of ERP We I'd our the our role schedule thank simplification like to system, change to this This safe fifth Chief costs. of The on Zelenka the the the during predictable to multiple decision streamline the for system priority, to of made divestitures to and the need deferral our deployment.

XXXX throughout next results. We to call our and will continue and more year's financial to training preparations now fine-tune the and maintain data employee with I'll turn ERP the further planned focused deployment. to Janet review system over for

Janet Zelenka

Of Cindy. the by revenues summarizing divestitures foreign of the million million million, second million results. quarter quarter rates will and $XXX.X the revenues compared I of you, to start $XXX.X Thank change million respectively. reduced and by second in $X.X our impact $XXX.X exchange $XXX.X were Total XXXX.

Regulated XXXX. remains business. and and small that million continues Domestic the Regulated on million second international now health revenues Compliance following include also manufacturing revenue It Services divestiture noted services. Waste $XXX.X the and portion includes of the were Compliance Environmental Waste hazardous we quarter slide As of waste in of Solutions compared care industrial $XXX.X to five, to Services the

revenue compared to impact second was as approximately a decline and X.X% line $XXX.X of foreign which in of result emerged $XXX.X divestitures of of demand within of quarter. in second quarter this the exchange declined worth a impacts, delivered million million Destruction Secure X% revenues in Excluding service North rates, drop in America. middle Services including the Information XXXX. cruise the The organic lower maritime ship pandemic revenue maritime business, the our in

part by the million. the million Services The effect and American June of April the Organic benefit in revenue foreign of $X.X down preventative rates resulted exchange deferral lower at due from of for America, of compared in in and from and declined XX.X%, net revenue reduced and decline. closed compared an Excluding second SOP million In our of XX $XX.X quarter the million, The in income rates volume million, quarter, and of Related approximately quarter quarter much open last of pandemic-induced hospital services second the XX% the million the impact to scheduling the quarter we The for XXXX. to operating for recall international from least closed of divestitures $X.X quarter. and elective and Communication the year. declined that to orders North variable $X.X stops was XX.X% from year. markets. were the compared the million $X.X XX% divestitures as benefit and quarter locations June. in in states $XX.X XX $XX.X lower maintain million was compared accounted operations start were Income foreign reflecting reflects surgeries second of to stops of of at discretionary organic reduced in operations for North that improved of $XX.X due income Destruction to pricing Information exchange to $XX.X a down In customer last the care minimal million effectively to offset Revenue shelter-in-place pricing, operations and demand by business when to revenue costs XXXX. in impact decrease was leverage. of impact SOP in decline XX% of which had a were revenues a the as our XX%, Secure of

early we $X per made share our diluted Additionally, gains. compared $X.X million that million extinguishment from productivity and $X per $X.XX to loss The in loss the or refinancing. million a or XXXX was diluted U.S. a to quarter improvements debt quarter transportation assessment loss second included of on approximately share GAAP $XX.X of is net $X.XX $XX.X year. quarter loss debt net sustainable current last in of our operational to of loss the comparable due million million of

expense million The receivable million year. improvement lower exceeding rates for due to last discrete quarter $XX.X accounts Capital from offset from the and annual roughly by of relief compared management. ERP primarily reduced related $XX.X government million executed Four, split first payment primarily XXXX to accounts the XXXX to pandemic incentive and professional to cash Second to Two, XXXX was of as $XX were by capital $XXX.X quarter due includes, primarily from by received the $XX.X XXXX U.S. deferrals payments tax-related million one, by in first service investments efforts $XX.X $XX.X primarily half was totaling XXXX. our $XXX.X lower software of compared first due U.S. agreements The interest tax partially $XX.X and on to lower million payable which revenues for prepaid $XX.X income million Adjusted lower million last international. to year. operations disciplined $XXX.X million in million and $XX.X lower and legal Solutions change to million driven was half for compensation, of $XX the Domestic and of of million second interest Environmental divestiture. half collections interest, reduce million, in XXXX of increase in GAAP the compared driven fees, million, collection operations period for Three, And comparable of improvements. driven advances five, debt, $XXX.X million. costs. of process flow was expense the year-over-year between an of higher of of items. included recently the timing expenditures

$X.XX per Excluding exchange in compared only the million, and share the revenue. of $XX.X despite rates impact $X.XX, XXXX. to $XX.X was operations million diluted of foreign earnings of income $X.X adjusted Adjusted divestitures declined second reduction million in the from quarter

$X.XX, following, the the interest was tax through, due lower on the lower impact year-over-year in from a $X.XX reduction As adjusted $X.XX, illustrated EPS an from from and bridge adjusted of to on divestitures, favorability on eight, the $X.XX slide higher flow expense. from variance revenue benefit unfavorability rate,

to first Our first for collections first revenues compared improvement is the to of and our of three days five XXXX. leverage ratio the quarter We the the XX in additional as credit was days half in Domestic and operations previously described. the days pandemic At outflow times. collection as DSO improvements. XX reported, million $XXX.X Free of defined the exceeding XXXX. quarter due of below quarter days first XX from divested was estimate for X.XX second flow businesses the compared year-over-year was from improvement X.XX an second quarter debt-to-EBITDA end to the agreement, days from Environmental $XX.X sequential quarter-over-quarter revenues for divestiture, better based When of was from our the trailing the in of due on adjusted was as days expenditures, from DSO, the lower cash our day capital maximum half times, of Solutions process from the XX excluding ratio, million, DSO to which cash quarter, $XXX.X The to calculation, million an compared XXXX. of XX-month was flow XXXX

over line business the $XXX the the we near currently the net million to paid have available revolving down I'll $XXX ERP management to our of January. million system quarter, credit $XX.X in of down support operating our beginning we we testing the the out We over debt of During financial of review $XXX $XX.X net and million. in for capital debt. million paid for and development, second approximately Since term. year, in the in expenditures and for our for ERP, launched have shifting invested Year-to-date, adjusted in of ongoing capital deployment million XXXX. expenses implications deployment operations $XX.X with million human now

deployment to the split remainder XXXX, maintenance expenditures in capital expenses licensing, of we ERP million and the million the shift will the of in of having to $XX operating the environment, $XX XXXX, the will cost XXXX. $XX ongoing be by We cost and incremental offset operations. IT ongoing anticipate incurring continued until $XX adjusted roughly Given to which system million will out of we be development both for this new between the systems for and avoid not enhancements by million legacy anticipate run

anticipate will to in ongoing Looking we deployment out costs, adjusted implementation the North which be XXXX, American of incurring operations.

now rate We assessing annual of deployment the that and run at XXXX. previously $XX the IT would which incur system currently estimated an new had portion be $XX date into during to July performance. pro-rated demand North $XX amount are July and currently Regulated for insights in Waste Services, preliminary the third million. revenue impacted approximately down revenues million July when cruise I'll were and compared our revenue lower provide in XXXX. the to a change to quarter few America including Compliance by within continues be pandemic ship million of costs. we to legacy million costs the ongoing will We these in maritime of the of the estimated both upon the $XX are Within business. systems, incremental The X% Depending to XXXX, costs these running turn

would have revenue in shown about America, the X% maritime Excluding we business, North July. in growth up

Waste compared service XXXX. our about our with actions in Information Looking relatively Destruction for and approximately that July Secure roughly measures with to were business We cautious COVID-XX North the reactivation a July. is at to of year. This remained our revenues impacts react XX% by July We Services cost resuming pandemic. will Regulated XXXX Services North included decline to as American our flat July preliminary down And have alignment to anticipate Information Destruction in last reactivation Compliance of results in for lag how may our in where to Outside and customers, Secure in of North compared markets revenues date of through drivers, America. anticipate business, they're customers the recovery. XX% states the about to results. the international revenue service numbers increasing remain in test certain the temporary positive investment encouraged We thinking stops America, consistent manage of

for closed requirements the The the we which quarter Revenues of example, approximately approximately currency will third earnings impacts. executive Specific a to on For tax translation a expected members loss with approximately pretax of company and cost receive total. like need to demand Primarily savings Argentina business. I'd of furloughed week. Act. the the the in long-term million. half CARES July, result our $XXX to were XXXX for travel are inflationary reclassification XXXX and make and In $XXX this bringing team consolidated of of non-cash Argentina, divestiture U.S. the that like back due to accumulated committed some quarter, with X% short-term as to provide balancing update health in associated The improving divestiture of million I'd hyper the to related the is refunds team adjustments to to operations expected regarding received of the warrants. an earlier cash we third business refunds. from our note EBITDA the for

quarter paid in of of U.S., our tax that we of the early the associated $X the also deferred XXXX. Outside quarter with be approximately second deferrals the approximately during on employer-related of benefited mentioned We XXXX benefit have I in indirect U.S. million payroll year $XX taxes anticipated million million additional second $X from full to call. last

expectations outlook. the long-range call, for last the On provided our we

long-range of impacts updating economic factor call the now plan our in will evolving normal will annual the the to turn have We process which commenced pandemic. I our Cindy. back of

Cindy Miller

you, Janet. Thank

the steady to uncertainty a priorities for Stericycle's our pandemic the against Although progress key remains and of our future. continues build team stronger foundation reality, make a

continue As continue operational customers' reduction. day. the and transformational to business drive over proud demonstrated past in made we've our this for to for lie we significant the meaningful ahead debt about remain pursue line us of towards innovative and the that team every excited needs quarter, our can the cash Stericycle am the at I and extremely open I and year. revenue response to many we we and nimble efficiencies, opportunities that generation challenges, and Q&A. progress long-term progress be Operator, please quality, journey

Operator

[Operator from Instructions] Our first Markets. Capital with Sean will Dodge come RBC question

Sean Dodge

Thanks. of Good course million, $XXX impressive. morning. it's generated Janet, $XXX the free the generation, quarters, you cash the first two the over million, certainly

the got mentioned that now you've You pocket CARES your in Act items in July.

items I into or cash things the guess, for? planning about we be year? free of thinking back or should of aware how that, be other any half should we there the cadence of the notable kind Are Beyond

Janet Zelenka

Yes.

you, thank Sean. So

to just a quarter generation, that clear, was the cash amount July in had factors So be variety which second not going. we part of got of

So sustainable generating think, and cash just revenues. was generation because that a of pandemic come I reduce what and let the what with me was, unpack peculiarities some of

is last revenues, to rate. about see the that legal a If achieve a to We the revenues days prepaid the onetime sustainable year, sustain at use we're so of day put plan of that of three So which second compensation a of payments the $XX we due receivable as the pay had worth in million. for results was a is look, collections ERP did you three we factor we fees. we $XX The having being cash of improve, to that DSO, cash $XX.X is about We onetime retain. about generate quarter, climb the our if did in lower days software worth a continue a we incentive full hope didn't the more million DSO. of we annual lower lower lower because to million, will deferrals. is driven incentive on collections But pay not accounts financial improvement of and you of benefit. we by That revenues is and reduced. that right professional not now exceeding to software that do our comp payments did That of

payment we're We real. what The our So will I of but accounts can The business go the lower continuing a to, well. sustainable increase lower as lower were have then relief going some incurred year we're expect million. tax-related interest on see those a debt, with are I through of increase and forward. costs, we which be do onetime lowered but some seeing support reduction you And rest of and due should as as also that the to around payable because see And only that to that it, of $XX deferrals, reduction in they'll we the align if costs part government the because now. rates trajectory you onetime is gave we right and that want, incurring we And sort is interest is spend cost revenues. they to deferrals, well.

I you what rest more of sustainable to the helps the quarter year. that So hope versus what and is the the dynamics into unique is unpack

Sean Dodge

facilities developed forward? of despite year. this you of and us the those. your are Very delaying then the pandemic, those plans or cadence ERP on going to XX you you Yes. facilities the there? earlier operating you from of to have sense pace many your the you. Can Thank had what for new That's mentioned you maintain out the primarily And And into introduced disruption rolled now? the referring kind great. you you've a progress operational on helpful. How those Cindy, initiatives, can give I continued think

Cindy Miller

Sean. Thanks, Yes.

things. a couple think I of

of most things all QX. we're that Our proud one for of, first, frontline folks, the

frontline to and But were all care really care members our thank services helping health shoulder keep up with world, And shoulder gets to as forgotten. networks sometimes essential like team running. to around really it global health professionals we've who we'd the

we then were And every that of And add we catalyst. top at operators to engineers our just dispatching, folks. all we a our we at look in look So facilities, the our the way way that do. the kick look we of equipment of of transformational and and as processing, at as awful we those really way guidance look you use And big start folks doing, way a that have at as to taking an from everything they continued mean the with we've pandemic look different engineering to operations change way team rightsized, change look our in way to the the just we're very containers, lot at a being proud an on a result I we do business, example.

tractors returned I equipments, and we've non-powered it's found XXX trailers. or type it's XXX it's power over We think whether extra. or chassis different

dispatching were some good in bit rather were event a weren't with more we need. we much controlled collections stops? just as paper we of would or found those what day's of to than Now But or of weeks by really discipline. a a reductions because We of because we planning it some was bench ahead carried of Sure. a that too couple

you plans is pounds seen of the gotten improved, process to improve stops this hour will When the effort that our from to per the XX%. them to facilities. to of we've think with about seen work prouder We able hour of of gotten paid talking hold continue what we things example, July, some to. quite great that $X believe facilities, containers as putting you just that in Those going we've to improved ones improve I all has organization. not hour. just responded, per about February to seeing an And those master we we're that. And improvement. some work better roll We've across I million back per team there. way We've that much the cost somewhere around But couldn't our in We've continuing are be that put all paid total done. again, and frankly, pushed XX% $X per into million So we're be XX%. on to everybody's slowly was referencing, in start what Sean, operating about were our really be

that for question. thanks So asking

Sean Dodge

on the congratulations in And the Thanks. performance quarter.

Cindy Miller

Thank you very much.

Operator

Our question Stifel. from Brian comes with next Butler

Brian Butler

Hi, questions. for good my taking morning. Thanks

Cindy Miller

morning, Good Brian.

Brian Butler

one, much you ERP Just and very have the on the XX I and was apologize the you first XX, the back occurs spend just into how XXXX about half, to think look helpful, but just XXXX? spend when missed for look if gave in the you wanted like? the in then I comments. timing additional to the what it your I does And color

Janet Zelenka

Sure.

will first $XX what So do to those planning are to $XX half, systems. in new the the deploy turn an And annualized we ERP. On to rate, we need about is million. the on million cost

our $XX deployments. based prorated will turn be on when $XX Like that based thought So on on. we going million, be to million we to them this year, it was

So well. will maintain to IT expenses ongoing we add a proration. will Those normal as a legacy run that have be range we the costs that and of somewhere that in operating rate

the right roughly call deployment the you those to on may that into should $XX about costs all that. bit. so they now, at now, be looking estimated estimate work $XX But next have will little we that that additional. have So system And prior I'm then the to change and year. that's them push million, We million need out had we we a do deferred right the and

Brian Butler

it's and up, running? on savings, of to once highlight savings are expectations follow kind up your what's a just annual the offset what the on again, And the

Janet Zelenka

Yes.

of the the just go business It business a have in through case our long-range business. for the ability run is planning savings is technical so since generating we our lot systems. So as our it's foundational, ERP, we assumptions business to we're on in of we this are and foundational terms the

of flow for cash is growth, So generation it the future the the the foundational company. future

Brian Butler

how quarter performed than and you that you guys how reach of flow free target? million after through COVID. Do Is feel And could you kind you something the this do cash faster that expected? $XXX about

Janet Zelenka

demonstrate And of to is plan to by flow five-year encouraged our really speaks the been the long-term really now it I'm $XXX do achieve ability our cash able to at over is that. end quarters. generation I to still the Yes, that we've past million the think few that right trajectory.

very As through of dynamics and we right about all I long-range update mentioned, will But I'm economy the government, look we're going that. at maybe tax flow the in the generation the and now, process cash and very, everything planning business. this and our positive

Operator

Manthey Our comes question from next David Baird. with

David Manthey

about processes, centralize On oversight, Thank improve slide you. fleet implement good Hi, talked field four, operational those where efficiencies, metrics, items, rationalization. of you morning. productivity, cost some

All sound information much like for you with alluded in of to couple in here systems. operational to near Janet discuss the process that of those you Maybe improvement get once at a could question. wins to be in ERP would things easier term? prior again, the this then And might better how accelerate been XXXX? you've able get And an system get the you

Janet Zelenka

you Yes, that. it's question. Thank a for great

getting business. to continue we a of you want on basis the and lot and but the to that done from have out the give don't So this data, Pooling weekly drive iterate with data it systems daily performance insights really of to the get of and systems spreadsheets. to talent a

system even we systems in leveraged lot So business was and did going We say another it also the the HR didn't really talent capital two change our helpful globe, HR the even have helpful we will system, That know and capital, people, system. We we can that was we put easier, spreadsheets, our time this more put managing we a take drive now amazingly to in been did will very time. were management this that which factors we has was. had where and everybody function I high-level across to insights be step that success in. human have a through on our forward. in our human because

key. we management, around also controls in we procurement purchase that end XXXX was We system XXXX, processes of able through leverage because system. during to purchasing in that was centralized the time to helpful put the that disciplined management which centralize really and built to the provide And a cost this were order of system extremely

are have. the for taking of advantage data plus system to analytics. organization we've every any talent we And in So the done extract we modernization

David Manthey

any And color. about risk office regarding you in some contract think hedging structure. sort language the the from changes great a potentially thoughts in That's random or on the question talked prices, your you. of Thank paper I past, the

Just be a update interested us results there? the potentially thoughts on forward. risk And hedging going how could your in It's in I'd obviously you just I major up and thinking about factor you're that down. hearing

Cindy Miller

Cindy. the Yes. for And questions. Dave, Thanks is this thanks joining. for

within paper, is maybe whether we're or Destruction probably come difficult just we seeing proud normal. there. think stops are service, piece with so new still we back terms our there remember, one as service we're renew able a I bring, I customers. our Number built its it's to come for that to select face is care customers not it's just since and with that continue the least out be that several But one, the information. one out what of to don't for the We Secure sensitive And for as XXXX. came have. Information priority premise. timing are at look the off value, table, we for paper. We service of, and to even to certifications I'm engagement, that's and the think most probably our that we What the with for are that any at, ever fact bring when reopen, of customers in And certainly us them, organic And things. customers, paid to things express, to of and the paid that think at get during we we collecting the quarters of and everybody has we securing extremely had engagement per stops our back the pandemic, the really in looking of the looking get we business service the and of in actually I guarantee growth take are line engagement consultative get to is

to from some what's work-from-home to is had just to looked today, So type interesting companies and process. the home, the survived also XX% two, out we'll key have will they be we figure And we a new pandemic, But folks to of think normal prior the that and I continuing think return. customers understand us I realistically, not Number I sheltering as say as of for forward, is. we move study whatever working every is with about I at Dave, think there recently business QX.

we're economies growth, organic So very I shift marketplaces. in potentially our service the necessary of their well mentality. do prepared that take the whatever to and it's a in And to businesses this more provide hunter our think place to responsibility world's revenue to in

about but as that can continue out difficult still is even more I to we opportunities commercial - open. time, I in challenges also team involved future in I'm much they be premature, opportunities. excited future And to become don't for three during you new to our and continuing tell very I'm actively this services want So that when markets rolled innovative

David Manthey

Thank Okay. you.

Operator

Schneeberger with Our next Oppenheimer. question comes Scott from

Scott Schneeberger

to morning, to I Good off segment. you second meaningful these that half? the base move then been trend-wise, what asking good in this, Cindy, the kind in two curious things? upon that Thanks I they through you've contrasting, And be guidance in I'm touched but very And you offerings stability with onto you've what that seeing small and and bad near then in And as everyone. regard to are Can loop it's customers the to trends regulated seeing much. we pandemic? not have like contribution the but guess to you're kind segment? start nice I'd are that just of customers large with term? the going of terms comparing a bad highlighted, provide know What and seen new second the and you of half, for you're just they going

Cindy Miller

Great questions.

So said, up a July just are what we look take we're we without the in, at about as seeing, if the X%. snapshot, we've maritime

do those but those whether stay of What from from facilities, compliant a say, waste. things, sure to doctors concern make are this. back those not independent all that with it's lot the think folks with perspective, us wanting might yet, their need there. we're independent doing I Certainly, of trend office type all and and not dentist engage to regulated a and to I with we Now what that will sure we are of make improvement seeing they be

over a I the portion best population, while is engaging quite that thing, XX. care also, over population, time the older and XX, of some think in coming the over success happens let's of to be And for population outside highest not there's still the elective spends with the pandemic surgeries doctors' large back, preventive group remember risk frankly, the one XX, and having going is very the a portion and that offices.

still to other there's who've pent-up it want of brackets, elective a or folks I of that and a little hesitancy back in still the the be we think and think take some surveys if whereas population in look I regularly of I demand, fully age surgeries So at to in scheduled knee care, preventive returning terms several their visits their with that segment type maybe know terms other and had bit from are stuff. might their care there some of

talking timing of a I'll and services, morning where a SLAs as to our in at an us meeting lots So pickup to ability doing operations the revenue. with how o’clock about going ask, positive. revenue and prior they've we to make of times. talk gone certain exceptionally time-sensitive our requirements on basis, well. very for commitments regular us to adapt which are the evening collect as start try with the afternoon frankly, wanting prouder long be adapted some Scott, I just pickups our of contracts in accordance requirements to and we When and to launching want new meeting though, pickup do And and with perform to And about, parking very, where those sake would customers with we've we're you partner making in pickup been quite forward, couldn't X customers. the days

PPE warehouse making this settings. a price have in value continue around Our and grocery our people ball operations, sure terms other value everybody And to how new or pricing and now make equipment services what's sure They'll recently, right about the we've And the to point, put of stores out we to we going we we service talk wrapped discipline to discipline involved wearing in service are is in crystal the long offerings when grow. are have we about table excited them. from very The your but we're know the marketplace. in at that have accretive. that we the how will don't some be of

also the wearing equipment, So expected. people for are warehouse crystal to work, we've not settings, long created the where PPE don't now will people should things. just of ball health-care-type what value terms service where to to the that say the But premium but how our I in know service I facilities, do ability we're company have bringing our are that be the customers, for the at in but be we those do that right we're do non-traditional to a providing, certainly wearing

Scott Schneeberger

real Janet think more on I And a role. it's And Cindy, gave for Janet, IT. you. in A broadly not known you Janet, I taking of quick nice Thanks. follow-up. the Great. CIO guess, background overview your maybe

CIO just If you your share plan kind you of for integrating could how your responsibilities? and vision CFO

Janet Zelenka

Sure.

for journey. been that, So keen synergy our well of roles, are the and linked, for we that IT Yes, so out the business, points. And ERP. as the are actually a in financial really that. well foundational as the thank great area focus A finance sure and that have roll making between I to a control lot as IT I before very CIO happens, I became think of the environment. CIO as is and career me of other And capabilities was CFO. environment between to all The the okay, you management two as ability an my control CFO then well. there's the I especially as have

So those of link and are key very they a between and couple areas I priorities, my finance of IT. the think well

Scott Schneeberger

Thanks.

Operator

with Ryan from comes Blair. question next Our William Daniels

Nick Spiekhout

aren't same contracts kind how a volume to garbage the to my for it. be pushback any need reduction a listed you've I experienced house stops, in I if if almost the about reduction to I know But for for like Nick Spiekhout you'd Hey, volume experienced and the garbage given talked based, wondering like they're month, instance, likely wondering don't of all? come like a at Ryan. was truck paying probably in stop. or amount in pricing want I'm if on just I only you've that guys. all once

Cindy Miller

businesses to think times they're I at help all they're support a of returned, growth. them great through their or question. of And That's them really whether when height the support difficult as customers have with Yes. getting our we work

be flexible. one as always that is been we adaptive. So collection we've somebody's been sensitive their of with people, information paper, understand that opposed top it understands always information as certified who drivers, I how well-trained that handled say, company, thing handle collecting needs sensitive securely. processing to we are with will a to move customer We've plant entrusting forward, being think base with you they're I the our the exactly well-trained

the can data a continuing all rising know. us, at take for I breaches is to look of cost So average do you and think

the I now provide. think and folks just with Secure understand somewhere the on of million Information problem tops that is breach $X when sensitivity we importance And look service and average that, you a or average. the right the data take at

about value who stop, who from I with the the paid deal in as value a the in with this the fee being is relationship customer, to often paid not security, the by perspective, is are a service piece. perspective in value from the it the might is we shred certification, appreciate talk by can it But So it's not we're have folks paper. is and

just with this making any in at me to? trying pandemic to like help see continue Of worked we anything the course, But been longer-term feel I point ability have customers as shred. of less through get grow to we have our have. we terms all So everybody positive don't to

Nick Spiekhout

missed business, of helpful And tracking for also up? further that, June how on mentioned kind was sure. SID. July volume-wise, you June? at to I for I a was How trending that if That's trend Thanks. I the Great. then just... related color that June? least for Was was apologize And

Cindy Miller

that's no, No, question. great a

continual seen improvements. have We

lot Now to a into a May a the because June as think, hey, remember, that in cases. still odd we're to and closing July, open are there's into there fact said, June back the that is maybe through more little attempts then was I of just we some of And kind go and little got June. states been bit a bit

July, then and close we certainly seen we've Janet think June we're manage. XX%, to have order improvement. an So it's I still them steady between servicing. and with to But be improvement. been with was maybe I help cautious I because have down simply open think and still difficult think had think XX%; But and customers around right stops, seen again. them open June again closed July. and I in to mentioned for there we're close I'm our in to And But to quite that's sure

we're So I'm months how to improvement. pretty through through we'll move it as see continues positive see But the we going QX. that the through continual

Nick Spiekhout

Great. questions. taking Thanks, Thanks guys. for my

Operator

question comes Markets. next Capital Jeff from Silber with Our BMO

Jeff Silber

much. so you Thank

changes during us by incremental business margins update give segments? now I'm pandemic. of lot are to a making can you major this been decremental wondering, the and What obviously each You've the segment? an the by

Janet Zelenka

medical are regulated think I and by shred and Information for Secure our segment, the comparable. margin Destruction roughly

be more leverage might be might to because think our to helpful the improvement through is drivers assess. which you're of that what operating trying think I I go

So they're categories. really split major into three

the is the first So divestiture.

business, trigger main communication primarily to and operating But you're about a size. the business mentioned are we improvement That's the Those lesser of the a Solutions million a segments savings. third we third as is all $X leverage those my operating of sustainable leverage another adjusted core in about for even And the I million the some could extent, the to of third. work the a we the on also - then adjusted level. across project other pull the mentioned about the account discretionary the the things we of $X conditions that the to And travel of like that EBIT at pulled have. terms that million we $X what we EBITDA seeing of that's both last that's watched or those at cross economic improvement. costs $X those Domestic in And segments about Environmental script. and were. low-margin core divested So things, And million were

to into to the to, the we see probably bottom. on. the not them function back to that feed the of part to that by below And So anymore. with we're being just be those aligned of discretionary sustainable have going business continue hope see costs divestitures business costs improvement drop the go will them We our will revenue committed

Jeff Silber

I even you guidance? I that. see the basis, do improvements, see quarterly Okay. bit envision annual if estimates were and But guess, guess That to is you we'll do appreciate with need a maybe it's more next along an on helpful. a ERP year. to all what a time not place. basis, over I or in on order reinstate the And

might framework So I be a think providing helpful.

Janet Zelenka

Yes.

economic our Destruction what with seeing I as the of to stability think and the orders, Secure pieces did will So what staying can I think reintroducing information business. by geographies we since closed we lead and we environment as is guidance. what impacted of going continue forward we're probably the stability would about happens open call this try of the And it in key pandemic conditions to to us their economic provide and in so shelter-in-place or Information sustainability see and in since in

Jeff Silber

just could sneak in. I one If more Okay.

a that with you'll position do few on call us? in a share mentioned When the times to you think You long-range planning. your be

Janet Zelenka

now planning I long-range fourth the So in it fall. goes think into discussed time, Last quarter the I call. process through the

would then, happy place insights I which if likely be have be that quarter. I'd before is a first But to So would put it, that in I them. the share

Jeff Silber

Okay.

much. it. to Thanks so forward Looking

Janet Zelenka

You’re welcome.

Operator

our call session. any Cindy to question-and-answer turn I to This the remarks. concludes over And like closing for would back Miller

Cindy Miller

say you in interest excitement appreciate I'd to just Stericycle. the appreciate would you, Thank listening I future. we continued And in - our to And your Ely. your shared like to call, everyone

And today. talking So for thanks soon. sure much to you be I'm we'll

Operator

The conference Thank has concluded. now for attending you today's presentation.

You now disconnect. may

Stericycle (SRCL) 6 Aug 202020 Q2 Earnings call transcript